by Luke Jones
Posted 4/15/2013 12:00 am
Updated 1 year ago
The recent movement of publicly traded Inuvo Inc. to Conway is the latest success story for the city’s active push to draw in more technology jobs.
Conway Chamber of Commerce President Brad Lacy said the town has made a concerted effort to cultivate businesses through both tax incentives and infrastructure development.
“We really have to play to what our strengths are,” he said. “Our demographics are very young, very well-educated people. That lends itself to white-collar endeavors. That doesn’t mean we forget about blue collar and manufacturing, and certainly many of those manufacturing operations have significant engineering staff needs as well. So I think it’s just a natural progression of what we’ve attempted to do.”
Lacy said Inuvo has committed to 50 jobs that he described as “very good.”
“These are product managers, software developers, marketing specialists,” said Inuvo CEO Richard Howe. “The lion’s share of these jobs is technical.”
Inuvo is closing its offices in Tampa, Fla., and New York City and focusing all its operations in Conway, where it shares a building with PrivacyStar, another recently imported tech company. Charles Morgan, former CEO of Acxiom Corp. of Little Rock, which was long headquartered in Conway and is still a large operation there, is a major investor in both companies.
Inuvo got $1.75 million from the Arkansas Economic Development Commission’s quick action closing fund to help move its facilities to Conway.
Similar AEDC incentives have gone to other companies that have moved to Conway in recent years. PrivacyStar, which relocated to downtown Conway in 2012, received income tax credits based on the payroll of new jobs, tax refunds on building material tied to its expansion and $224,000 from the quick action closing fund.
In 2008, Hewlett-Packard got $10 million from the fund and a cash rebate of 5 percent of payroll taxes for five years.
Howe listed several reasons besides incentives for his desire to move Inuvo to Conway.
“One was the university culture here,” he said. “That was encouraging for us. It gives us access to talent. There have been a whole lot of companies that have been built up successfully in university towns.”
With three colleges, the town is often home to a large number of young professionals who need to choose whether to stay in the town or look for jobs elsewhere.
“Very few places are like Conway where the median age is 25,” Lacy said. “We grow as a city because kids come here to go to school and they never leave. Obviously some do, but some don’t.”
Lacy said this educated workforce has become a big selling point for the city’s economic developers.
“I think it’s becoming better every day,” said David Hinson, chief information officer at Hendrix College. “You look at how well Acxiom has done historically — there’s a growing and vibrant entrepreneurial community here with Startup Arkansas and other initiatives. I see improvements every time I look around. It’s a great place for tech people to be.”
In the new economy, Lacy said, “the value is in people. If you’re smart, and you’re mobile, you can go wherever you want to. The companies are going to gravitate to where those smart people are. Communities that are smart are going to try to keep those people.”
Howe said another reason was existing talent in the town due to other tech companies, like Acxiom and HP, being present.
“The third component of it was the community aspect of the city itself,” he said. “We have a very young demographic. We’re an Internet marketing company, so our demographic of the average employee is around 30 years old. A lot of our employees are at the stage where they’re starting to raise families. They’re looking for this sort of community.”
Lacy said the Inuvo employees were attracted to newly developed areas like Hendrix Village.
“The quality of life in Conway is very attractive to people,” Hinson said.
“Inuvo is a great example,” Lacy said. “Over the Christmas holidays, one of my team members here spent time with some of the management-level folks from Inuvo wanting to relocate into Conway. The process went very, very well.
“Ten years ago, or 12 years ago, that would have been a much harder sell for us. If I ventured a guess, I would say people wouldn’t have lived here.”
Lacy said the city has spent as much effort on developmental measures as it has on monetary incentives.
“I think what the city did is really begin to focus on quality-of-life issues, quality-of-place issues,” he said. “You can look at the investments made in parks, the investments made downtown, you look at the design standards they’ve passed on how buildings need to look. All of those things, when put together, contribute to a different quality of place than existed 15 years ago.”
Labor costs are more favorable to Inuvo in Conway, too. Howe said salaries would have to be roughly 30 percent higher in New York, one of Inuvo’s two previous locations. The company stated in a release that it would save from $80,000 to $120,000 per month when it exits its lease in New York City.
“It’s interesting: You’d think that in today’s day and age you’d want to move to, say, San Francisco,” Howe said. “But you can’t compete there. If you really think about it, if we had moved our company to San Francisco, we’d be competing with thousands of similar-sized companies that are all competing for money, talent and mindshare. Why would we do that?”
The easier competition and lower costs may be exactly what Inuvo needs: It posted a net loss of $7.02 million in 2012 on revenue of $53.3 million and a loss of $8.97 million in 2011 on a top line of $35.8 million. Its operating expenses grew from $20.6 million in 2011 to $34.2 million in 2012.